EXETER, Pa. — Keystone Automotive Operations announced financial results for the second quarter of fiscal year 2010 ended July 3, 2010. Highlights include:
Net sales in the second quarter of fiscal 2010 were $137.0 million, an increase of $7.4 million, or 5.7 percent, compared to $129.6 million for the same period in the prior year, driven primarily by volume increases. These increases were achieved despite the ongoing economic recession, including continued elevated levels of unemployment.
Gross profit for the second quarter was $44.2 million, an increase of $4.4 million, or 10.9 percent, over the same period in the prior year. Gross margin was 32.3 percent for the three-month period ended July 3, 2010, an increase versus 30.7 percent for the three-month period ended July 4, 2009. These increases were primarily attributable to higher sales volumes and improved product sales mix.
Income from operations for the second quarter of fiscal year 2010 was $6 million compared to $1.4 million for the same period in the prior year. This improvement was primarily attributable to the gross profit increase previously mentioned.
The company recorded a net loss of $0.9 million for the three months ended July 3, 2010, versus a net loss of $3.4 million for the same period in the prior year. The decreased net loss was primarily attributable to a $4.6 million improvement in income from operations, partially offset by a reduced income tax benefit in the amount of $2.3 million.
As of July 3, 2010, the company had a cash balance of $41.5 million and an additional $41.2 million of borrowing capacity under its revolving credit facility. Working capital totaled $127.7 million at July 3, 2010, up slightly from $127.4 million at January 2, 2010.
Net cash provided by operating activities for the six months ended July 3, 2010 was $18.2 million compared to $30.8 million for the same period in the prior year. The decrease in net cash provided by operating activities resulted primarily from higher accounts receivable and inventory levels, partially offset by higher accounts payable levels. This decrease in cash for higher net operating assets employed in the business year-over-year was partially offset by a $6.0 million increase in net income adjusted for non-cash charges.
"We are pleased to report our second consecutive quarter of higher year-over-year sales as well as a year-over-year increase in gross margin, both of which we believe are a reflection of continued market share gains and an enhanced focus on product mix and marketing activities," said Ed Orzetti, CEO of Keystone Automotive Operations, Inc. "Our financial position remains solid, with healthy cash, liquidity and working capital positions. With U.S. unemployment continuing to hover close to 10 percent, a recovery in the automotive aftermarket accessories and equipment industry remains elusive. However, our mission remains to support customers and vendors with programs that help them become more efficient and profitable."
